LOWEST IN REGION

Relief as state subsidy cuts pump prices by Sh40

Without the cushion, a litre of petrol would have traded at Sh173.70

In Summary
  • A litre of super petrol is now retailing at  Sh144.62 in Nairobi.
  • Oil marketers have accused the government of delayed disbursement of fuel subsidy funds.
A business man sells jerrycans to motorists who are queuing for fuel along Kisumu-Nairobi road on April 12, 2022.
A business man sells jerrycans to motorists who are queuing for fuel along Kisumu-Nairobi road on April 12, 2022.
Image: DANIEL OGENDO

Motorists have been saved from paying Sh40.24 more on a litre of diesel by a state subsidy that will keep pump prices lowest in East and Southern Africa.

The Energy and Petroleum Regulatory Authority on Thursday announced new fuel prices, a move likely to resolve the artificial countrywide shortage that has seen a litre of petrol trade at a high of Sh300.

Although the price per litre of super petrol, diesel and kerosene rose by Sh9.90 in the new price list, the situation would have been worse were it not for the state subsidy programme rolled out in April last year.

A litre of super petrol is now retailing at Sh144.62 in Nairobi up from Sh134.72 while that of diesel is going for Sh125.50 up from Sh115.60.

A litre of kerosene on other hand will retail at Sh113.44 up from Sh103.54 until May 14.

Were it not for the government cushion, a litre of petrol would have retailed at Sh173.70, diesel Sh165.74 while kerosene mostly used for lighting and cooking would have traded at Sh139.89. 

While releasing the new prices on Thursday, Epra director general Daniel Kiptoo said the hike is a result of a 20.47 per cent increase in the average landing cost for super petrol,  24.7 per cent for diesel and 11.84 per cent for kerosene.

This translates to a 20.47 per cent change in the cost of super petrol, 24.7 per cent change in the cost of diesel and 11.84 per cent change in the cost of kerosene.

"The government will utilise the Petroleum Development Levy to cushion customers from the otherwise high prices," Kiptoo said.

He said oil marketers will be compensated Sh29.08 per litre of petrol, Sh40.24 per litre of diesel and Sh26.45 for kerosene.

While the prices are the highest in the country's history, they are cheaper compared to neighbouring countries in the East and South of the continent.

In Uganda, for instance, a litre of super petrol is retailing at Sh164, diesel at Sh142 while a litre of kerosene is retailing at Sh138.

In Tanzania, a litre of super petrol is going for $1.33 (Sh152.95) diesel $1.26(Sh144.90) and kerosene at $1.25 (Sh143.75).

In Rwanda, a litre of super petrol was selling at $1.343 (Sh153) and a similar amount for diesel while kerosene was being sold at $1.08 (Sh125).

In South Africa, a litre of super petrol is selling at R21.01 (Sh168.8) in Johannesburg and R20.39 (Sh163.12) at the coast.

Global fuel prices have been rising in the past month following a supply chain disruption caused by Russia's  invasion of Ukraine, a move condemned by several countries mostly the US and western Europe. 

Even so, the price increase has started easing, with a barrel of oil trading below $100 on Thursday. 

The average price of Brent oil so far this month stands at $102.96 a barrel, compared to $117.25 the previous month.

The government has promised to continue cushioning consumers against global high prices, with Treasury CS Ukur Yatani saying the available funds will take the programme till the end of June.  

Yesterday, the government said it was planning to clear the remaining fuel subsidy arrears owed to oil marketers by Tuesday next week.

Energy CS Monica Juma told journalists on Thursday that already the Treasury had released the Sh14 billion owed to marketers and was at the disbursement stage.

She said the government has so far paid at least Sh36 billion to marketers since the subsidy plan kicked off a year ago, wondering why the traders are causing unnecessary panic in the market by hoarding.

''What those dealers are doing amounts to economic sabotage. Sad that they chose that route despite us constantly engaging them. We are investigating a number of them," he said.

Oil marketers have accused the government of delayed disbursement of fuel subsidy funds, forcing them to export the product to neighbouring countries. 

Edited by Henry Makori